KiwiSaver the bedrock for Kiwis to have the good life

KiwiSaver the bedrock
for Kiwis to have the good life – and a good retirement -
with a few enhancements

The Financial Services
Council (FSC), lobbying for an affordable, fair and
attractive retirement income policy, says KiwiSaver is the
key to a comfortable life after 65.

FSC, whose 21 members
are managing more than $80 billion in savings and providing
financial services to more than 2 million New Zealanders,
says retirement savings is an urgent issue the country must
recognise and address and is taking its arguments out to the
community and the Beehive.

The Council has this week
appointed one of the country’s leading communications
managers, Susan Robinson-Derus, to further boost its efforts
to have millions of New Zealanders engage in what has been
described as “the most important conversation of our
time”.

Ms Robinson-Derus, of Auckland, has had a
successful career in journalism, corporate and consulting to
multiple global organisations over the past 25 years. She
has recently undertaken strategic communications work for
Fonterra.

Ms Robinson-Derus would be working on ways in
which to inform and engage people nationwide in the
discussion on future options for retirement incomes.

The
Council will also host a major forum in October involving
overseas experts and New Zealand decision makers, to focus
on how to more than double retirement incomes – while
continuing to give people the choice to retire at age
65.

“KiwiSaver has been well supported in its first six
years but we have to move now to make the scheme work harder
for people so that they can have the house, the education, a
lifestyle with choices and a comfortable retirement,” says
FSC Chief Executive Peter Neilson.

“Recent life
expectancy forecasts indicate that by 2055 New Zealand will
have 1.7 million people aged 65 or older with an expected
life span of 95. Superannuation, current rates of
contributions for retirement under KiwiSaver and taxation
cannot stretch that far so we must act now to change our
financial behaviour and create the policies, including a
more attractive taxation regime for long term savings, that
make it easy for people to save today so they have surety
for tomorrow.

“Something will have to give if we are to
avoid large tax rises to pay New Zealand Super from age
65,” Mr Neilson says. “We have to look at the measures
we need so people can keep retiring at age 65, and use
KiwiSaver to fund the gap until New Zealand Super cuts in at
a later age. If KiwiSaver became universal for all
employees, this would see the pressure to pay future
pensions eased, while for 18 to 40 year-olds on the median
wage their retirement incomes would more than double to
$48,000 a year.

“Scrapping a compulsory retirement
savings scheme in 1975 is now one of the Zealanders’
greatest regrets. We need a fully informed national
discussion on how we manage retirement incomes in future.
KiwiSaver now involves more than 2 million employees and our
research continually funds around 60% support among adults
nationwide to make it compulsory.”

The FSC is
undertaking further research on policy options which would
make greater KiwiSaver coverage and higher contributions
acceptable and affordable to those who have concerns. The
proposal will be presented at the October Future of Super
Conference followed by discussions with politicians to help
strike a national consensus for a new multi-party agreement
and provide secure policy for the future, Mr Neilson
says.

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